Global Business Environment Analysis

This assignment requires students to analyze the global business environment, considering factors such as country-level governance, social networking, and lean/green supply chain management. The student is also asked to apply Hofstede's cultural dimension model to a case study, providing insights into how it can inform business decisions. A suitable title for this assignment is 'Global Business Environment Analysis'.

Global Business Environment
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GLOBAL BUSINESS ENVIRONMENT
Table of Contents
Introduction......................................................................................................................................3
Task1: Analyze the key factors which drive globalization..............................................................4
P1. Investigate key factors that drive global commerce and trade..............................................4
M1. Critically analyze the impact that key factors have on the global business environment....5
D1. Critically evaluate the global business environment............................................................6
Task2. Determine the strategic difficulties related to operating in a global environment...............6
P2. Clarify the difficulty of strategic challenges faced by organizations when operating in a
global environment......................................................................................................................6
M2. Critically analyze the strategic challenges in the context of risk and diversification
strategies and the supply chain flow............................................................................................7
D1. Critically evaluate the global business environment............................................................7
Conclusion.......................................................................................................................................8
Introduction......................................................................................................................................9
Task3: Evaluate how a global market influences an organization’s structure, culture, and
functions..........................................................................................................................................9
P3. Evaluate the influences of globalization on organizational governance and leadership,
structure, culture, and functions...................................................................................................9
P4. Evaluate the influences of ethical and sustainable globalization on organizational functions
.....................................................................................................................................................9
M3. Critically evaluate global market influences in application to appropriate theories and
models relating to organizational structure and culture.............................................................10
D2. Critique strategies that can be adopted by organizations operating in a global business
environment...............................................................................................................................10
Task4. Evaluate the influence of globalization on organizational decision making and strategy. 11
P5. Evaluate the different ways decision-making can work effectively in a global context.....11
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P6. Determine and articulate the various routes to internationalization....................................11
M4. critically evaluate the key barriers in doing business internationally and make
recommendations on how they can be overcome......................................................................11
D2. Critique strategies and how they should adopt in the organizational structure and decision-
making processes.......................................................................................................................12
Conclusion.....................................................................................................................................13
Reference.......................................................................................................................................14
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Introduction
Globalization is required for an organization for its effective business growth. There are various
challenges, which are affecting the concept of globalization. In this project, the focus is given on
a company named SASOL Limited, which is based in South Africa. It is considered a fast-
growing company and is dealing with chemical and energy. The organization can use PESTLE
analysis to identify the challenges that can influence the global trade, and with the findings, the
company can develop an appropriate business strategy. The company is operating in various
countries including Australia, Canada, Mozambique, and Gabon. The company is also planning
to expand its operation in other countries. To achieve this, they must use an efficient marketing
strategy.
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Task1: Analyze the key factors which drive globalization
P1. Investigate key factors that drive global commerce and trade
There are many factors, which governs the globalization. It includes political, technological,
economic and social factors. The key concept is, the various market segments scattered across
the globe should be considered as a single market, and the cost should be distributed accordingly.
The key components that are controlling the global trade are - International trade, technological
advancement, and international investment. As a strategic advisor of SASOL, the individual
should examine these factors to design a new business policy (Boshyk, 2016). However, he also
must report findings the new appointed CEO and other board members.
International Trade Policy: It contains various trade agreements between countries and the
related international laws that are followed during business. A company or a national
government can develop the policy. However, the World Trade Organization (WTO) and The
United Nations govern most of the policies.
International investment: A company can take a loan from the government where it is
developing the business, or the organization can approach World Bank for finance.
Technological advancement: technology plays a vital role in globalization. All the latest
technologies should be adopted by an organization as per business requirement. It includes both
online and offline technologies. It would help to advance the performance (Campbell et al.
2016).
However, the advisor can use PESTEL analysis to understand the challenges related to business.
It will help to improve the globalization policy. The PESTLE analysis is explained as follows:
Political factor: Each country has a certain political condition, which can be either stable or
unstable. If the local government does not support new entrants, it could affect the international
trade policy. Moreover, if the country does not provide financial support, it could be difficult for
SASOL to do the business successfully.
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Economic Factor: The affordability of the consumers is a primary factor for the growth of
business (ALI, 2017). Every country has certain needs of energy and chemicals for their
industrial growth and daily activities. If SASOL offers these services with reasonable price and
quality, the public will automatically be attracted towards the organization. However, the
company must review the economic policies of a country before opening a branch. The positive
policy will help to get investment for the business
Social factor: Cultural and religious challenges are some major issues, which can affect the
trade. If the local people feel the newly arrived company is not respecting their beliefs and
cultural views, it could be difficult for that company to do a sustainable business in that region
(Lasserre, 2017).
Technological factor: If a country does not have sufficient technology-based resources, the
industrialization will be extremely affected. As modern business is heavily dependent on digital
technologies and other advanced machinery, the local people must have sufficient knowledge in
this. The digitalization can help SASOL to market their chemical products and energy services,
which will help to invite investors as well as consumers.
Legal factor: Each country has their specific laws, which are used to govern the business. These
laws can affect the international trade policy. Moreover, improper taxation and excessive
corruption can influence the business. Therefore, SASOL must make certain agreements with the
local government before opening a branch.
Environmental factor: It could affect the supply and demand. It means if the climate condition
of a country is not good, it would affect the distribution of products as per deadline and thereby
overall busies will be affected (Smith, 2016).
All these factors will affect the market and the competitive advantage of a company.
M1. Critically analyze the impact that key factors have on the global business
environment
Positive political support and socio-economic support certainly helps a company to expand its
business. However, if an approached local government has no interest in their economic growth,
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it would be a major challenge for SASOL to operate the business. On the other hand, the
advancement of technology can drive SASOL Ltd to new heights. Further, an effective legal
structure and environment of a country will also help the organization to globalize its business.
D1. Critically evaluate the global business environment
There are various challenges as well as opportunities, which are faced by an organization during
globalization.
Opportunities: When a company operates in a multination environment, it gets to know about
various laws, cultures, and religions. According to Crane and Matten (2016), if an organization
gets to know regarding diversified interests of people and their point of views associated with the
industry, it can alter or improve the business policy. Moreover, they can also improve their
business functions.
Challenges: Adapting cultures or outsourcing employees are major challenges faced by an
organization. Some countries may not have skilled workforce, which is required for the business
and due to this, the company need to hire outsourced employees from other countries, which can
be expensive at a certain situation (Oriesek and Schwarz, 2016).
Task2. Determine the strategic difficulties related to operating in a global
environment
P2. Clarify the difficulty of strategic challenges faced by organizations when
operating in a global environment
Various types of strategic challenges can arise while operating in a global environment. These
are listed below:
Understanding cultures or languages: Most people are not familiar with English and as a result,
communicating with them can be very difficult. Similarly, the complexity of their culture will
also be not understood. For example, most of the people in China do not speak English and other
foreign languages. Thereby, without language translator, it is not possible to understand their
culture and religious views.
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Legal platform: The tax rules, transportation laws and various other regulation changes
according to the country. Therefore, if SASOL does not study the relevant jurisdictions of the
country, it would affect their business market (Peng, 2016). For example, India and similar
democratic countries always display an open legal structure, which invites foreign investment as
well they support other new companies which shows interest to open a business in the country.
Technology and communication mediums: Communication with consumers is one of the
biggest strategic challenges faced by companies. If a company cannot communicate with the
local customers, the management of the company would not realize the demands. It would affect
the business policy. Moreover, if the country does not have enough technology related sources ,
it would also affect the business (Gambhir et al. 2016). For example, most of the central African
counties are not familiar with advanced technologies and thereby it is not possible to
communicate with the people of that area.
Environment: Some environmental issues that can affect the business are energy consumption,
pollution, and recycling. As SASOL is dealing with energy and chemicals, they must abide by
the environmental laws. Further, it would also help to grow the business in an eco-friendly
manner.
M2. Critically analyze the strategic challenges in the context of risk and
diversification strategies and the supply chain flow
Legal structure or environmental condition can affect the flow of the supply chain. The suppliers
and the client company does not follow the legal aspects of international law. It could affect the
supply chain as the country where they are operating can take severe legal actions against them
(Kasemsap, 2016). Further, if the demand of the customers is not fulfilled within the specified
time, SASOL can lose their customers. It could happen due to an extreme environment (climate).
Moreover operating the business within the diversified area is a high risk.
D1. Critically evaluate the global business environment
The business strategy can be evolved as per the demand of the people of a specific country.
Understanding diversified needs help an organization in effective pricing and quality production.
It is a great opportunity for SASOL. By attracting various customers, it can generate huge
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revenue. On the other hand, when an organization changes its business policy, it requires major
structural modification, which can be expensive for the organization (Sassen, 2016.). Moreover,
if the company fails to mark its significance in that area, the business objective will fail.
Conclusion
There are various factors, which are affecting the business of a company. In the context of
globalization, a company must analyze the external factors to develop a sustainable business
policy. It also helps to realize how the legal aspects can be applied in an area with an appropriate
manner to manage the business. The advisor must understand all the findings and explain it to
CEO for designing an efficient business policy. It recommended using advanced technologies for
better globalization.
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Introduction
A company cannot become globally successful without improving the business functions and the
organizational culture, the overall performance of the business cannot be improved. SASOL
Limited can use Hofstede’s Dimensions of Culture and McKinsey’s 7S model to examine and
improve the organizational culture and structure.
Task3: Evaluate how a global market influences an organization’s structure,
culture, and functions
P3. Evaluate the influences of globalization on organizational governance and
leadership, structure, culture, and functions
To operate the business globally, the management should improve the skills of the employees
first. It requires certain sets of training fro week employees. Moreover, the human resource
policy and organizational laws also should be improved. The top management should guide the
employees to enhance productivity. In the case of SASOL, the business functions such as
marketing, production, and supply should be improved to operate in a large market. In addition,
the new CEO should have transformational leadership qualities to motivate the employees
(Grosanu et al. 2015). Further, a proper governance policy should be enforced so that a
collaborative and positive work culture can take place in the organization. It helps to increase the
commitment and performance of the workers.
P4. Evaluate the influences of ethical and sustainable globalization on
organizational functions
Each country has different sets of cultures and ethnicity. When a company adapts globalization
policy, certain changes happened to its ethnic culture. Proper laws should be applied so that any
discrimination cannot happen in the organization in term of religion or culture. Moreover, the
combination of various cultures enriches the standard of the organization. However, to maintain
sustainable growth and positive culture, the management should always monitor the employees
and their activities (Wood et al. 2016).
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M3. Critically evaluate global market influences in application to appropriate
theories and models relating to organizational structure and culture
Globalization certainly helps an organization to improve its organizational culture, structure and
business functions (Tallman et al. 2018). To understand this, McKinsey’s 7S model can be
applied. It considers the following elements:
Strategy: The business strategy designed to achieve and maintain a competitive advantage in the
global market.
Structure: It depicts the way in which the organization is controlled. The CEO and the board of
directors organize the SASOL.
Shared values: It means the organization should maintain a corporate culture and the members
should collaborate with each other for better decision-making.
Systems: It refers to the procedures that are being followed to improve the performance of the
employees.
Style: It defies the type of leadership style being adopted by the CEO or other directors oF
SASOL.
Skills: Proficient skills that are required to manage the business in a global environment
Staff: It indicates the employees from diversified culture and their capabilities
D2. Critique strategies that can be adopted by organizations operating in a
global business environment
An organization can adapt work culture from different countries, or they can use new training
strategies to enhance the skills of the employees. Positive work policy and effective training will
improve the skills, which will improve the overall productivity (Tregear, 2015). Further, a new
marketing policy can be developed which will help to increase sales for the organization.
Specific business standards can be selected for improving business.
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Task4. Evaluate the influence of globalization on organizational decision
making and strategy
P5. Evaluate the different ways decision-making can work effectively in a
global context
According to Heisig et al. (2016), various employees from different countries or sectors can have
a different view regarding the improvement of productivity. They are engaged to work as a team
in SASOL, and it helps to grow their knowledge base. Multilateral thinking will help to
understand the challenges as well as opportunities for the organization. CEO can collect all their
individual views to make appropriate decisions. Moreover, the opinion can be taken from local
employees. It will make a significant impact on the business strategy.
P6. Determine and articulate the various routes to internationalization
The organization can approach the government of certain countries and make agreements with
them to expand the business. In addition, online marketing or promotional marketing mix can be
used to increase the market. If an organization wants to expand its business across the world, it
must focus on international trends and the demand or interests of the customers across the globe.
There are various barriers, which can affect the internationalization. It includes political, social,
economic, legal, environmental and technological factors. The business leaders can analyze the
macro factors and make proper policies to deal with these barriers. Moreover, social media can
be used as a communication medium for business growth (Kasemsap, 2016).
M4. critically evaluate the key barriers in doing business internationally and
make recommendations on how they can be overcome
The people of different parts of the world do not speak with the same languages. Working in a
global environment requires a huge number of workers and managing them in a centralized order
becomes very difficult. Further, it is expensive for the company as all the employees must be
trained with effective skills and should be provided with proper wages. However, with proper
leadership, the organization can overcome these issues. It is recommended to use online sources
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for effective training to teach languages as well as skills (Taneja et al. 2015). It will reduce costs
up to a certain extent.
D2. Critique strategies and how they should adopt in the organizational
structure and decision-making processes
Hofstede's cultural dimensions theory can be used for better decision-making in the context of
organizational culture. It defines that the top management should be responsible for making
decisions. However, their decisions can be influenced by various positive views of the
employees. All the employees regardless of their gender or race should be equally treated, and
their opinions should be considered (Wirtz et al. 2015). Depending on long-term and short-term
goals, the leader should decide specific strategies.
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Conclusion
Based on the above project, it is concluded that globalization is necessary for increasing brand
value as well as business expansion. The organization functions and the relevant culture can be
improved with the globalization concept. It is recommended to adopt advanced technologies to
communicate with customers, and thereby better strategy can be applied. The advisor of SASOL
should help the CEO to make better decisions with Hofstede’s model, and it will help to expand
business in other countries as well.
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